If you are working on reducing your debt, a debt reduction spreadsheet may be the right tool to help you achieve your goal. There are many available for free on the internet and many of them come with a debt calculator that you can easily use with the spreadsheet. Debt reduction spreadsheets make it easier to see where you are starting from on your road to being debt free. As you change the situation, it makes it easier to track the changes you make.

Why A Debt Reduction Spreadsheet is Important?

A debt reduction spreadsheet  is important because it will help your keep track of changes to your income or expenses. Calculations may change for your projected dates of debt pay-off and amounts of payment depending on the debt reduction plan you are implementing. Changes can affect the estimated date of debt elimination in your debt reduction spreadsheet so it is important to record all changes.

The use of a debt reduction spreadsheet also helps keep you motivated by giving you a clear picture of goals and progress made on your debt reduction plan. A good visual aid can go a long way to enabling you to remain disciplined and on track.

Different Types Of Debt Reduction Spreadsheet

Not all debt reduction spreadsheets will look the same. They will vary depending on the debt reduction plan or method being implemented. Debt reduction spreadsheets work really well with the snowball method of debt reduction. Since this method usually requires the debt with the highest interest rate to be paid first, the debt reduction spreadsheet is a valuable way to maintain a record of which debts are to be paid and in what order.

Use the built in calculator on the debt reduction spreadsheet to update data necessary to complete your plan. Keeping track of increases in income or reduction in expenses can allow for more money to be paid towards debts. Using the calculator and making adjustments in the spreadsheet will show how much faster you can eliminate debt. Always customize the debt reduction spreadsheet to fit your personal goals and situation.

Debt Reduction Spreadsheet Alternatives

When I first taught people about debt reduction spreadsheets about 10 years, the spreadsheet was done with paper and pen. However, these days mostly everything automated and done on a computer. So most debt reduction spreadsheets are created on a spreadsheet template like Microsoft Excel. I have even seen a client of mine use a debt reduction spreadsheet on a Mac.

Debt elimination is a goal that many people want and need to achieve. The ease and convenience with which we previously have charged purchases have been replaced by the stress and anxiety of debts that are approaching or surpassed unmanageably. This unfortunate position has compelled many people to seek professional assistance for debt elimination methods that can turn their situation around.

There are many companies and professional counselors to assist people with debt elimination. A professional counselor will evaluate the client’s financial situation in order to devise a plan to enable the client to reach the debt elimination goal. There are several methods that can be implemented in the plan for the client. One method for eliminating debt is the Snowball Method Debt Elimination method.

The Snowball Method is similar in theory to the image the name conjures. Basically, this method involves targeting the smallest debts to payoff first working up to the larger debts. The rate at which the debts are paid off gains speed as the program is followed, like a snowball rolling downhill.

Snowball Debt Elimination Method Are as Follows:

1) Make a List of All Debts

List your debts from the smallest balance to the largest which allows you to clearly see how the plan will reach the goal.

2) Make the Minimum Payment

The required minimum monthly payment that is stated on your monthly bill or statement should be paid on time. Once you have written down all your liabilities and the monthly budget has been established, make a pact with yourself to paying the bills on time and for the minimum required amount. As long as you don’t increase the debt by continuing to charge on the accounts, this will slowly begin to reduce all your debts.

3) Extra Payment Will Get The Debtors Away

Once all the minimum payments have been made, assess your budget to locate any extra money that can be added to the payment on the smallest debt. Pay the excess in addition to the minimum payment on the smallest debt. This will reduce the amount of this debt much more rapidly than paying the minimum payment alone. This will be the first debt eliminated.

4) Rinse and Repeat

Once the smallest debt has been paid off, use the money that would have gone to that monthly bill to add to the minimum payment towards the next debt on the list. The payment on the next debt will be the sum of:

a) The original monthly minimum payment
b) The monthly minimum payment of the previously eliminated debt
c) Making an extra payment on your smallest debt.

In this manner, the amount that is available to pay on each debt will increase as the previous debt is eliminated. This enables you to pay the higher debts much faster which results in the “snowball” affect. This debt elimination method will not only result in paying the debts off faster, but will save a lot of money by the time the plan is completed.

If you are struggling under the yoke of high debt, the last thing you need is a lecture on the merits of timely payments and living within your means. You are probably looking for some straight-forward advice on how to get out of a tight situation. It doesn’t take a lot of brains to get into debt and it doesn’t take a genius to get out of it either. Here are some simple tips to start reducing debt.

Educate Yourself

Understand that you are not the first or last person to be in your position. Lots of people have been and are going through the battle with high debt. There is a lot of information printed, televised, written and blogged on the subject. Look for materials that offer different strategies for you to compare. Try a library or bookstore to get an idea of the many different programs from many experts. Choose a medium that is comfortable enough for you to really dedicate some focus to learning from. Remember, you are looking for information that is right for you, but don’t expect to see yourself in every situation discussed. What you’re looking for is a good understanding of the system and how you can work with it.

Organize Your Bills

Sit down and list all your monthly bills, monthly income and total outstanding debt. This action alone can be all the wake-up call most people need to alter their attitude towards credit and spending habits. You need to realistically see what you’re dealing with before you can formulate a budget. Even if you have to get assistance to make your new financial plan, this is a tool you will need.

Make a Realistic Budget

Evaluate the lists of income and out-go. Don’t forget those monthly living expenses. Cut back where you can. It won’t work to say, “I will spend nothing on entertainment” because when you prohibit yourself, you want it more. Instead make a smaller budget for entertainment and stick to the limit. It’s all about discipline.

Get Rid of High Interest

The reason for establishing a budget is to free up some cash to put towards your outstanding debt. You need to be able to pay more than the minimum monthly payment in order to start shrinking your debts. The interest charges that accumulate every month are a big part of debt becoming unmanageable. Paying more on these credit bills now will save money later.

Cut Back on Spending

Cut down the shopping! If you can’t pay cash, you can’t afford it. It really is that simple. You have to break the habit of using credit to make purchases. Nothing will accomplish that better than having to empty your wallet or go to an ATM to see your balance dwindle for a purchase you probably didn’t need.

Diversify Your Income

Extra money coming in means more money to pay on credit bills. Maybe going out and getting a second job is not possible. Try babysitting instead of partying on the weekend. Find a hobby that lets you make something that can be sold. Get an online job part-time and take all the earnings and put them on your credit bills. Don’t make the mistake of rewarding yourself for the extra work. Being out of debt is reward enough.